S&P 500 backed away from the brink yesterday after being capped below ‘last resort’ resistance at 4101. This keeps the market with the long-term downtrend still intact whilst below this level, in the view of analysts at Credit Suisse.
Key short-term support is at 3956/49
“S&P 500 backed away from the brink yesterday, reversing its recent close above the important 2022 downtrend after being capped below ‘last resort’ resistance at the 4101 December bearish ‘reversal week’ high. This keeps the market finely poised into this week’s FOMC meeting, with the long-term downtrend still intact whilst below this level.
“We reverse into a tactically bearish stance, with first key support at 3956/49. Back below here would be the first step to reasserting the still intact, at least at this stage, bear market. Next supports thereafter are seen at 3926/25 and then 3886/77.”
“We are still very wary of the potential for an aggressive short-covering rally. However, we remain of the view that a weekly closing break above the 4101 December high is needed to trigger a capitulation-driven move higher, whilst also confirming that we have seen an important change of longer-term trend from down to sideways.”
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